Press release

LEM announces results for H1 2020/21: demonstrating
resilience in face of Covid-19
Geneva, Switzerland, 03 November 2020 – LEM (SIX: LEHN), a leading global company in electricalmeasurement for industry and automotive applications, announces first half results for 2020/21 (AprilSeptember) compared to 2019/20:•

Sales decreased by 9.4% to CHF 144.1 million (CHF 159.1 million); at constant exchange rates,
sales decreased by 4.4%

•The company benefits from a diverse global distribution of sales, with China further increasing its
share:– China CHF 54.2m (37.6% of total)– Europe CHF 42.7m (29.7% of total)– North America CHF 14.2m (9.8% of total)– Rest of World CHF 33.0m (22.9% of total)•

Bookings recovered during the second quarter from the significant decline during the early phaseof the Covid-19 pandemic, and in the first half are down 15.6% at CHF 135.3 million (CHF 160.4million)•

R&D investments of CHF 13.0 million (CHF 14.3 million) were maintained at 9.0% of sales•

EBIT reached CHF 28.3 million, decreasing by 10.8% (CHF 31.8 million); however, the EBIT margin
was only very slightly lower at 19.7% (20.0%)•Net profit for the period was down by 6.8% at CHF 23.4 million (CHF 25.1 million); at constantexchange rates, the net profit would have been CHF 2m higher

Frank Rehfeld, Chief Executive Officer, said: “We are pleased that during the second quarter ourbusiness showed again resilience and rebounded somewhat from the impacts of the first wave of theCovid-19 pandemic. Our underlying revenues were down only 4.4% in constant currencies for the first
half, driven mainly by encouraging performances in China, renewable energy and the motor control
business in the Automotive segment. Looking ahead, the diversity of our applications across multiple
geographies and sectors continues to provide some balanced apportionment of risk. There have beensome improvements in our order book, however there is little long-term visibility on how Covid-19 may
develop and impact customer confidence and operations across our various B2B businesses.
Therefore, our outlook for the full year is cautious.”
Andrea Borla, Chief Financial Officer, remarked: “We maintained our R&D investments at 9% ofsales while ensuring very strict control on SG&A costs in line with the drop in sales. This resulted in apleasing EBIT margin of 19.7%.”

LEM Holding SA

Page 1/6

Industry segment: encouraging performance in China and Renewables despite Covid-19
H1 sales in the Industry segment totalled CHF 112.6 million, down 9.1%. At constant exchange rates,sales decreased by just 4.2%, which was pleasing given the difficult economic environment. It is worth
noting the strong FX effect on reported sales from China and North America. Covid-19 continues toimpact sales, orders and customer confidence, and there is little visibility on how this may play out
longer-term in our B2B businesses which have different investment cycles. Sales increased by 4.6%
in China, our largest market, thanks mainly to Renewable Energy, and this is particularly encouraging
in such a tough competitive market. However, there were significant declines in Europe (-14.3%), North
America (-20.4%) and Rest of World (-15.8%). Orders stabilised somewhat in Q2 compared with Q1,but year to date are still down by – 18.2%, with a particular lack of customer confidence in Drives andHigh Precision.
2020/21in CHF millions

Businesses
Drives2019/20 Change

46.8

51.2

Renewable
Energy41.4

40.7

Traction

20.8

26.5

High precision

3.7

5.6

Total Industry

112.6

123.9

Comments-8.7% • Longer-term investment cycles• Asia recovering, USA weak
+1.7% • Solar growth with short-term cycles• China growth continues• Europe flat
-21.5% • Longer-term investment cycles• India and China lockdown impact• Very strong traction sales last year
-34.2% • Lack of investment confidence fortest benches & medical equipment-9.1%

Automotive segment: China and Europe show signs of recovery after shutdowns
H1 sales in the Automotive segment totalled CHF 31.5 million, a decrease of 10.4%. At constantexchange rates, sales declined by 5.0%, which is encouraging given the dramatic shutdowns during
the first phase of the Covid-19 pandemic.
China recovered well in Q2, although first half sales as a whole declined by -16.0%, partly due toconsumers postponing purchases following the extension of electric vehicle subsidy programs from2021 to 2022. Europe showed strong growth (+38.2%), as manufacturers (OEMs) ramped-up theirproduction operations. North America (-42.4%) is impacted by reduced sales of 12V products while thetransition to green cars is progressing at a slower pace than other regions. Rest of World grew by 1.1%
thanks to strong sales in Korea. The order book filled up significantly during Q2 as production restarted
after the first wave of shutdowns, but it is too early to see if these levels will be maintained.
in CHF millions

2020/212019/20 ChangeBusinesses
Battery Management

18.9

22.7

Motor Control

11.3

11.3

Charging Systems

1.3

1.2

Total Automotive

31.5

35.1

LEM Holding SA

Comments-16.6% • US reduction in 12V demand• Demand for High Voltage products
broadly stable+0.2% • Production ramp-up in Q2
offsetting shutdown in Q1+10.1% • Continued momentum for battery
electric and hybrid vehicles-10.4%

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Profitability holds up well despite Covid-19
Gross profit for the first half fell by 11.9% to CHF 65.5 million, principally due to the impact of Covid19 on higher air freight costs for delivering products to customers. The gross margin declined by 120
basis points to 45.5%. We continue to execute various efficiency programs.
We remain vigilant with overheads, and kept SG&A costs essentially flat at 17.6% of sales, while they
declined in absolute terms by 10.6% to CHF 25.3 million (CHF 28.3 million).
We continue with our long-term investment in future applications with R&D at 9.0% of sales (9.0%),
although this decreased in absolute terms by 9.5% to CHF 13.0 million (CHF 14.3 million).
EBIT dropped by 10.8% to CHF 28.3 million (CHF 31.8 million), due to the decline in revenues andgross margin. However, our EBIT margin was only very slightly down at 19.7% (20.0%).
We posted a net profit for the first half of CHF 23.4 million, down 6.8% from CHF 25.1 million last year,
reflecting the decline in EBIT offset by an improved FX effect in this period. The net profit margin wasslightly up at 16.2% compared with 15.8%.
Free cash flow was CHF 7.8 million (CHF 23.5 million) reflecting a deterioration in net working capitaland the first cash payment of CHF 6.4 million in tax due on the transfer of IP announced last year.
Cautious outlook
Although there has been some evidence of recovery in certain markets and businesses after the firstwave of the Covid-19 pandemic, there is little visibility on how this may play out. There are many
unknowns beyond LEM’s control. For the full financial year 2020/21, the company remains cautious
and currently expects sales to decline by around 10% in reported Swiss Francs to CHF 275 - 280
million (CHF 307.9 million for 2019/20). LEM anticipates an EBIT margin not far off 20%.
Webcast and Financial Half Year ReportFrank Rehfeld, CEO, and Andrea Borla, CFO, will provide a detailed presentation of the half year
2020/21 results today at 10:00 CET at a media and investor community webcast.
Listen to live webcast
https://78449.choruscall.com/dataconf/productusers/lem/mediaframe/40684/indexl.html
The Financial Half Year Report and webcast slides are available in the Investor Relations section ofthe LEM website (www.lem.com/en/investors), where the webcast will later also be archived.
Dial-In Numbers
Switzerland & Europe:
UK:
USA:
Other countries:+41 (0)58 310 50 00+44 (0) 207 107 06 13+1 (1) 631 570 56 13
https://media.choruscall.ch/documents/Attended_DI_numbers.pdf

Financial calendar
The financial year runs from 1 April to 31 March
4 February 2021
Third-quarter results 2020/21
19 May 2021
Year-end results 2020/21
24 June 2021
Annual General Meeting of Shareholders for the financial year 2020/21
1 July 2021
Dividend ex-date
6 July 2021
Dividend payment date

LEM Holding SA

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LEM – Life Energy Motion
A leading company in electrical measurement, LEM engineers the best solutions for energy andmobility, ensuring that our customers’ systems are optimized, reliable and safe.
Our 1,500 people in over 15 countries transform technology potential into powerful answers. We
develop and recruit the best global talent, working at the forefront of mega trends such as renewableenergy, mobility, automation and digitization.
With innovative electrical solutions, we are helping our customers and society accelerate the transition
to a sustainable future.
Listed on the SIX Swiss Exchange since 1986, the company’s ticker symbol is LEHN.
www.lem.com
Contact: Investment community
Andrea Borla, Chief Financial Officer
Phone: +41 22 706 1250
Email: investor@lem.com
Contact: Media
Cabinet Privé de Conseils s.a. (CPC)
Nick Miles, miles@cpc-pr.com, mobile +41 79 678 76 26
Michael Füglister, fuglister@cpc-pr.com, mobile +41 78 839 07 62

LEM Holding SA

Page 4/6

Appendix
Consolidated income statement
April to September
In CHF thousands

2020/212019/20

Change
-9.4%

Sales

144'078

159'054

Cost of goods sold(78'557)(84'722)

Gross margin65'52174'333Gross margin (in %)

45.5%

46.7%

Sales expense(12'823)(14'581)

Administration expense(12'495)(13'747)

Research & development expense(12'972)(14'334)

Other expense

(0)

(0)

Other income

1'113

90

EBIT

28'34431'762

EBIT margin (in %)

19.7%

20.0%

Financial expense

(186)

(357)

Financial income

85

108

Foreign exchange effect109(1'189)Profit before taxes

28'35130'323

Income taxes(4'955)(5'233)

Net profit of the period

23'39525'089Net profit margin (in %)

16.2%

15.8%

LEM Holding SA-11.9%-10.8%

-6.5%

-6.8%

Page 5/6

Key Figures
2020/21

In CHF millions

2019/20

ChangeQ2 - Q2 6M - 6M

Orders received

Q1

Q2

Q1

Q2

Q3

Q4

FY

Industry

47.5

55.7

71.3

54.8

63.8

64.5

254.3

+1.6%

Automotive

12.0

20.2

17.2

17.2

17.5

16.4

68.2

+17.5%-6.3%

Total LEM

59.5

75.9

88.4

72.0

81.2

80.8

322.4

+5.4%

-15.6%Q3

Q4

FY-18.2%

Book-to-bill ratioQ1Q2Q1Q2Q3Q4FY

Q2 - Q2 6M - 6M

Industry

0.79

1.06

1.10

0.92

1.10

1.11

1.06

+14.2%-9.9%

Automotive

0.83

1.19

0.95

1.00

0.94

1.18

1.01

+18.4%+4.6%

Total LEM

0.80

1.09

1.07

0.94

1.06

1.12

1.05

+15.5%-6.8%

Q2 - Q2 6M - 6M

Q3

Q4

FY

Sales

Q1

Q2

Q1

Q2

Q3

Q4

FY

Industry

59.8

52.8

64.6

59.3

58.2

58.2

240.4

-11.0%-9.1%

Automotive

14.5

17.0

18.0

17.1

18.5

13.9

67.6

-0.8%

-10.4%

Total LEM74.3

69.8

82.6

76.4

76.7

72.2

307.9

-8.7%

-9.4%

Q3

Q4

FY

Q2 - Q2 6M - 6M

EBIT

Q1

Q2

Q1

Q2

Q3

Q4

FYIndustry

12.3

12.1

14.3

13.2

11.5

11.4

50.4

-8.2%

Automotive

1.0

2.9

2.4

1.9

3.2

0.5

7.9

+55.3%-6.6%

Total LEM

13.3

15.0

16.7

15.1

14.6

11.9

58.3

-0.3%

-10.8%Net profit of the period

Q1

Q2

Total LEM

11.1

12.3

LEM Holding SA

Q3

Q3

Q4

Q4

FYFY

Q1

Q2

Q3

Q4

FY

13.9

11.2

26.9

8.7

60.7

-11.4%

Q2 - Q2 6M - 6M
+9.3%

-6.8%

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